ISLAMABAD: Finance Minister Muhammad Aurangzeb has acknowledged that some companies are relocating out of Pakistan due to high taxation and costly energy prices.
Addressing the Pakistan Policy Dialogue, the finance minister said the government is fully aware of the economic difficulties facing the country. He noted that tax policy has now been placed under the Ministry of Finance, while the Federal Board of Revenue (FBR) is solely responsible for tax collection.
According to him, separating tax policy from tax collection was a necessary reform.
Aurangzeb said Pakistan received $38 billion in remittances last year, while remittances are expected to reach $41 billion in the current year. He added that major reforms have been introduced in the tariff sector, stressing that increasing duties further would be harmful to the economy.
“It is true that some firms are leaving the country. We must accept that high taxes and expensive energy are genuine issues,” he said, emphasizing the need to rationalize duties and reduce the cost of doing business.
The finance minister further stated that non-banking individuals are being brought into the formal financial system and that tariff rationalization is essential for shifting towards an export-led economy.
He announced that by June this year, all government payments will be shifted to digital channels.
He said economic growth is only possible through sustained reforms aimed at reducing the burden on the national exchequer and stabilizing the economy. He added that tariff reductions would boost exports and industrial production, noting that duties on raw materials have been reduced for the first time under tariff reforms.
